Six Sigma Assignment Problem - Case Study: Productivity Improvement



Case Study: Productivity Improvement

Modern Castings Ltd. is an auto-component manufacture supplying to all major OEMs in the country. They have recently started to process export orders and facing touch time to meeting the production targets.

MCL make about 150 types of aluminum alloy castings; mainly exhaust manifolds, intake manifolds and pistons. They supply castings in 5 different alloys grades. High silicon grades generally have lower yields.

The process starts with die preparation and coating. There are 4 die preparation groups. Then dies are installed in any of the 20 casting machines. They use twin cavity dies. On the other side, pre-case aluminum slabs are melted in electric furnace and the metal transferred to holding furnaces. They have 5 holding furnaces. Each holding furnace feeds to 4 casting machines. The die setting times, pouring time, and cooling time vary from component to component. The optimum conditions are given process engineering team.

On a hot summer after noon, the Operations Head has called an urgent meeting. The secretary has informed all the key people of the department and the Black Belt attached to the department. She has arranged the conference room on short notice and also arranged for snacks, anticipating the meeting is going to take long time. She understands the situation based on the boss mood. The meeting has started sharp at 5.00 PM.

The Operations manager looked at the audience and said that

Our top management has just taken a decision to increase the productivity by 50%, to meet the customer demand and profitability target. As you are aware of the shop floor condition, we are struggling to meet current demand.

I know this is going to be very tough targets. However, we don’t have options. We have to do it some how. I need all your suggestions and we have to make an action plan and present to the top management within 48 hours.

There was complete silence for 5 minutes. Then in a low voice, the production supervisor said that

It is not possible, as we have frequent break downs, rejections and new product trials etc. With great difficulty, we are meeting the current schedules.

The production planning in-charge added that material shortages, frequent changes from marketing leading to unplanned changeovers. He further added that production quantity is varying a lot from month to month. In one month, the production target is easily achieved and in another month we are well short of the target.

The Black Belt came forward and offered the following explanation to the production planning in-charges comments:

I have analyzed the achievement of production target and the product mix over the past six months. It is very interested to note that, the product mix strongly influences the production. When some components are in large quantities the monthly in plan the targets are missed and when they are not in the plan the production targets are easily achieved.

The production planning in-charge immediate reacted as follows:

Product mix is some thing; we do not have control and depends completely on the customer orders. We are in buyers market. In the recent sales conference, they have highlighted that the product mix is going to get even worsened from the production point of view. We can’t complain and need to prepare ourselves for this reality.

Another production supervisor emotionally said that

Over a period of 5 years, number of products has increased from 30 to 150. The volumes per batch have come down drastically. Earlier, one product we used to run for few days continuously. Now we finish the batch in some times in less than a shift. All these things have increased number of changeovers. Lot of time is wasted in doing changeovers and there are many problems associated with it. We are not able to predict the changeover times; many times we are not able to achieve the best yields.

The maintenance in-charge has said that

We have really touch time maintaining the machines, as we are not getting the machines for preventive maintenance and spares availability is a problem.

The production supervisor has immediately attached

Every time we give the equipment for preventive maintenance, the equipment gives trouble and they always take much more than allotted time for preventive maintenance.

Process engineering in-charge said that

I had analyzed the production data (see daily production chart) and the process is very stable. Only way to increase the production is by increasing the machine speeds and reducing the equipment cycle times. This is quick way of increase production.

File: BB-Case-1.xls

The maintenance in-charge has emotionally said that

Last year your department has followed same approach to increase production and we are facing the music – breakdowns have increased, quality problems and rejections have also increased.

After patiently listening to the day-to-day problems, the operations head has firmly said that

I had checked the installed capacities of our equipment and looked at the benchmarks from other plant and the target is not impossible. All the problems you are telling are not new to me. What I am looking from all of you are ideas to meet the challenge.

I am forming a cross-functional team consisting of Six Sigma Black Belt and production supervisor, maintenance in-charge and production planning in-charge. You have find answers to the following questions?

1. How much production we can increase without adding any new equipment?
2. What are the major causes for loosing production (yield)?

Q1. How to measure productivity in case of multi-product environment? (Hint: The number of castings made will depend on type of component and alloy in which it is cast)

Q2. To answer the first two questions of the operations head, what data you propose to collect and what analysis tools you plan to use?

Q3. Should they increase the capacity by doing major changes to process and equipment as suggested by Process engineering in-charge?

Q4. Identify the possible projects, in the above case.


Now that's a hot potato scenario. Here are my answers, though:
Q1: I would measure organization's throughput instead of productivity
Q2: I would look at operating costs, inventory (raw materials and finished goods) and realized sales (products accepted by customers).
Q3: I would apply TOC (constraint management to begin with) and Lean principles to determine what is necessary to change
Q4: Depends on the outputs from Q3

There is plenty of literature available on the concepts of TOC and Lean, if necesary.

SD Aaron

I like that. Start with TOC to balance your flow and identify the constraints. Then use this to prioritize your Lean efforts to the constraints.
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